Functions of industrial supplier relationships and their impact on relationship quality

Although recent scholarly work on business relationships often discusses relationship quality as a major issue, especially with regard to the phenomenon of vendor stratification, there is still little empirical research on this important construct. In this paper, the authors provide a thorough conceptualization of relationship quality and its possible antecedents, i.e., the direct and indirect functions of the relationship for the customer. Drawing on an empirical base of 230 buyer questionnaires, the authors show that the extent to which a supplier fulfills direct and indirect functions in a relationship has a direct positive impact on the relationship quality perceived by the customer. This impact is especially strong when the customer can easily replace the supplier or, in other words, when the supplier faces competition. The findings are discussed and the authors provide managerial implications for decision-makers from both buyer and supplier organizations.     

Changes in sponsorship value: Competencies and capabilities of successful sponsorship relationships

The sponsorship relationship has evolved considerably over the past few years. As a result, the value delivered to both sponsors and the sports entities with which they form relationships needed to be redefined. While some of these partners have made the necessary leap forward, some sponsors have also been confronted with resistance on the part of sport entities to adapt to evolving perceptions of value. Based on a qualitative study aimed at canvassing the views of some of the most prominent experts in the field and spanning 4 years and four continents, we document this evolution of sponsorship value and identify those key competencies that differentiate successful sponsors from less successful ones. Our research provides insights for other inter-firm relationships, particularly those in the service sector.     

The impact of degenerative episodes on the sponsorship B2B relationship: Implications for brand management

Sponsorship B2B relationships generally are entered into by sponsors seeking brand-related benefits through association with a sport entity brand. Negative incidents involving athletes representing the sport entity may threaten the brands of both the sport and sponsor and can weaken or even dissolve the partnership. The management of these episodes is critical in protecting the sport entity's brand equity, as well as the sponsor's brand, and ultimately the relationship. This study explores multiple stakeholders' perspectives on these degenerative episodes and the potential relational outcomes using a series of depth interviews with major sponsors and sport entities. We identify key constructs such as attribution of blame, societal norms, zone of tolerance and perceived severity which influence whether this behavior acts as a degenerative episode in the relationship. Factors such as existing relationship quality and episode management can affect the impact on the relationship as well as the extent of relational change.     

Flexibility in industrial service relationships: The construct, antecedents, and performance outcomes

Exchanges between service providers and their customers on business markets increasingly take place in the form of long-term business relationships. These relationships are governed through formal or informal agreements. However, actors are bounded in their rationality and find it impossible to contemplate all possible future contingencies. The more formal and detailed the contracts they conclude, the likelier it becomes that at least one actor is going to perceive a need to adjust the initial agreement as environmental events unfold. In this case, the actor relies upon his partner's flexibility. This paper deals with service providers' flexibility and presents empirical results from the market research sector including outcome variables (satisfaction, trust, commitment) and determinants of service provider flexibility (uncertainty, relationship-specific investments, mutuality, long-term orientation). Empirical results suggest that service provider flexibility is an important determinant of customer satisfaction, trust, and commitment.     

A relationship strategy perspective on relationship portfolios: Linking customer profitability,commitment, and growth potential to relationship strategy

The paper develops a three-dimensional portfolio model for business relationships which distinguishes among six different categories. Based on assessments of customer profitability, customer commitment, and growth potential, the positioning of a given customer relationship in the portfolio allows managers to determine appropriate customer relationship strategies and appropriate performance indicators. Results from applying the portfolio model are reported and managerial implications and future research are discussed.     

Building customer relations over the Internet

While previous marketing activities were primarily focused on increasing market shares in terms of a mass marketing based on single transactions, the past few years saw a paradigmatic shift towards relationship marketing. This change in viewpoint is based on the finding that the establishment and maintenance of long-term relationships have a decisive influence on corporate success. In this study, the authors present a critical theoretical and empirical analysis of the contribution the Internet can make to successful relationship marketing. The study focuses on the influence that important characteristics of the World Wide Web (WWW), such as its interactive structure and constant availability of information, can have on key variables of relationship marketing, i.e., commitment, satisfaction and trust. For example, the authors provide empirical proof of potential withdrawal of trust on the part of the customers if their expectations with regard to these characteristics are not met.     

Channel relationship and business uncertainty: Evidence from the Hong Kong market

This study examines the dynamics of channel relationships between an end user and multiple suppliers in Hong Kong, a major international logistics hub in Asia. Drawing on the literature on channel relationships, we examine the links between different channel relationship variables and the contingent effect of business uncertainty on the links between these variables and supplier commitment. The results of the study indicate that expected relationship continuity mediates the effects of trust and relationship quality on commitment. Furthermore, the positive effect of trust on commitment is found to be stronger when business uncertainty is high than when business uncertainty is low. As supply chain management is becoming essential for firms to succeed in today's business, industrial marketing managers need to be aware of the dynamics in channel relationships and to better manage their supply chains. The implications of our findings for research and for the practice of channel relationship management are provided.     

A buyer's perspective on collaborative versus transactional relationships

This research examines collaborative and transactional relationships in buying firms to determine whether collaborative relationships offer greater benefits than transactional relationships, and to ascertain which relational factors drive satisfaction and performance for both collaborative and transactional relationship types. Factor analysis, t-tests and step-wise regression were used to analyze data from a survey of buying firms. Results show that collaborative relationships offer higher levels of satisfaction and performance than transactional relationships. Satisfaction factored into two separate constructs: satisfaction with the relationship and satisfaction with the results. Of the relational factors examined, trust is the most important predictor of performance and satisfaction with the relationship regardless of the type of relationship examined.     

Exercised power as a driver of trust and commitment in cross-border industrial buyer-seller relationships

The article reports the findings of a study conducted among 151 U.S. export manufacturers of industrial goods regarding their working relationships with foreign customers. Specifically, the emphasis is on the sources of power exercised and how these affect trust and commitment in the relationship through the mediating role of conflict and satisfaction. Using structural equation modelling, it was confirmed that the exercise of power derived from coercive sources increases conflict and reduces satisfaction, while the exercise of non-coercive power sources leads to lower conflict (but not significantly increasing satisfaction). Conflict was found to be negatively associated with trust, as opposed to satisfaction which enhances trust. Trust was subsequently revealed to foster commitment in the relationship. Conclusions and implications are derived from the study findings and directions for further research are provided.     

Product and relationship quality influence on customer commitment and loyalty in B2B manufacturing relationships

The article examines how product and relationship quality influence customer commitment along with their combined effect on customer loyalty. The results show that product quality influences positive and negative calculative commitment. With regard to relationship quality, its “social” dimensions such as cooperation and trust have a much greater influence on commitment than its “technical” dimensions such as knowledge transfers and adaptation. On the “social” side, cooperation and trust positively influence affective and normative commitment, with trust also positively affecting positive calculative commitment, while on the “technical” side the only significant link is between adaptation and normative commitment. As for the consequences of commitment, affective commitment positively influences attitudinal and behavioral loyalty, while negative calculative commitment positively influences behavioral loyalty. In addition to indirect effects, product quality also directly positively influences attitudinal and behavioral loyalty. The results imply that customer loyalty depends more on “emotional” (affective commitment) than on “rational” (negative calculative commitment and product quality) motivation to continue the relationship.     

The impact of psychological contracts upon trust and commitment within supplier-buyer relationships: A social exchange view

Central to this study is the emerging body of knowledge describing how social exchange relationships are being nurtured. A random sample of 343 Australian distributor firms from within the motorized vehicle industry was used to test a model developed on the basis of social exchange theory. Psychological contracts are perceptual in nature and were found to encompass reciprocal obligations stemming directly from the relational orientation between suppliers and distributors. This construct was also shown to have a positive impact upon the level of trust and commitment within the relationship. These findings have significant managerial implications for the manner in which managerial decision makers are modelling the firm-customer relationship because trust and commitment are essential elements in the development and maintenance of such relationships. The theoretical and managerial implications discussed have highlighted the need for further studies because there are deficiencies in the marketing literature pertaining to this important construct.     

Dark side of relationships: A tensions-based view

By drawing on the tensions-based view to depict the components of the dark side of relationships, this study presents a conceptual model explaining how the dark side of relationships can moderate the positive relationship between relationship quality and relationship function. The authors test the hypotheses via a mail survey involving 136 manufacturing firms. The results support the hypotheses, which posit that relationship quality is positively associated with relationship function. Moreover, the empirical results partially support the argument of the author that the influence of relationship quality on relationship function is strengthened or weakened when three relationship tensions (namely, behavioral, structural, and psychological tension) are balanced or imbalanced. Theoretical and managerial implications are extracted from this study, and potential future research directions.     

The antecedents and consequences of organizational and personal commitment in business service relationships

This paper explores the potential for business service customers to form separate bonds of commitment with the service firm and the service representative. It examines the role of the individual and identifies six potential antecedents to each type of commitment. It also proposes that both types of commitment will influence the degree of relational exchange between the customer and the service firm. The hypotheses are tested using multiple regression and data from a survey of marketing research managers. The results support the majority of the hypotheses.     

Refining value-based differentiation in business relationships: A study of the higher order relationship building blocks that influence behavioural intentions

Research on the behavioural intentions (BI) of business-to-business customers has focused on the influence and the interactions among constructs driving BI, giving rise to two perspectives for the structural equation modeling of constructs influencing BI. In the first perspective, BI is impacted directly by relationship quality (RQ) and its antecedents such as relationship benefits (RB) and relationship sacrifices (RS). The second perspective suggests that antecedent dimensions of RB and RS may act indirectly through the construct of relationship value (RV), which drives RQ but also directly influences BI. The current study was undertaken to resolve the differences between these two perspectives. The findings indicate that RQ has a strong direct influence on BI while RV has a weak direct influence but a significant indirect influence on BI through the RQ construct. In addition, the constructs of RB and RS influence RQ directly, as well as through the RV construct.     

The effects of technology-mediated communication on industrial buyer behavior

Sellers are embracing technology-mediated sales communication tools such as videoconferencing systems, cellular phones, web sites, and electronic data interchange (EDI) systems in an attempt to control selling costs while maintaining the personal touch. What is unclear at this point, however, is if investment in communication technology actually pays dividends for industrial suppliers. This research explores the topic by examining the effects of buyer satisfaction with the adoption of technology-mediated communication (STMC) on channel partner relationships. STMC is found to have significant, positive, direct effects on future intentions (FI). Furthermore, these effects are found to be partially mediated by trust and commitment.     

The outcome of company and account manager relationship quality on loyalty, relationship value and performance

This study explores the effects of perceived relationship quality of the company and account managers with customers. It examines the effects of both types of relationship quality on relationship outcomes including: loyalty, relationship value, and performance. Consistency and relationship-specific investments are tested as mediating constructs between relationship quality and relationship outcomes. The model was tested in the automotive parts industry in Brazil. Findings indicate that relationship quality with account managers is directly related to loyalty and perceptions of relationship value. However, relationship quality with the firm is related to loyalty indirectly, through relationship-specific investment. Further, perceptions of consistency do not mediate the linkage between relationship quality with the company and account managers and specific investments. Theoretical and managerial implications of the findings are presented.     

Conceptualization and measurement of relationship quality: Linking relationship quality to actual sales and recommendation intention

Following over a decade of relationship marketing, this paper re-visits the notion of relationship quality to determine relational drivers of account profitability. Customer executives from multiple industries are interviewed to identify critical success factors in buyer-seller relationships. Based on their responses, a “back-to-the-basics,” grass roots approach to the measurement of relationship quality is offered. To further demonstrate its value for marketing practice, this measure of relationship quality is administered to a nationwide sample of key customer decision-makers to determine its link to profitable outcomes. The results support this measure as a driver of actual sales and recommendation intention.     

Commitment in business-to-business relationships: The role of organizational and personal needs

This article examines commitment in business-to-business (B2B) relationships from the purchasing manager's perspective. It proposes that purchasing managers will form stronger bonds with suppliers who are better able to satisfy both the buying firm's organizational needs as well as the purchasing manager's personal needs. It also proposes that purchasing managers will be more influenced by personal rather than organizational need fulfillment. The results from a survey of purchasing managers support all hypotheses. The findings suggest that marketers will be able to develop stronger bonds with purchasing managers by offering benefit bundles that address both organizational and personal needs.     

Industrial brand value and relationship performance in business markets — A general structural equation model

This paper develops a general model of industrial brand value and relationship performance in business-to-business markets from the perspectives of consumer and industrial marketing literature. The structural equation model integrates the analysis of industrial brand value and relationship performance. The model describes the extent to which supplier-buyer transaction performance is influenced by the eight important factors: supplier competence, purchasing value, customer satisfaction, switching cost, brand trust and loyalty, relationship quality, commitment, and transactional performance.The general model is applied to organizational buyer groups of comprehensive industrial markets (Electronics, Chemicals, Equipment, etc). The analysis finds that supplier competence directly affects purchasing value and customer satisfaction, and via purchasing value and customer satisfaction, it indirectly affects commitment, switching cost, brand trust and loyalty. The managerial implications of the study results are also discussed.     

The relationship between buyer and a B2B e-marketplace: Cooperation determinants in an electronic market context

“Stop thinking like a supplier and start thinking as a customer.”

The authors argue that cooperation may be achieved by augmenting the core product with technology-based services. Given the growing importance of real time information exchange and interactivity, a better understanding of the use of technology to the establishment and development of the buyer-supplier cooperative relationships is essential for knowledge advancement. This paper argues that firms should aim to put themselves into their customers' shoes and use the “voice of the customer” to take their major relationship management decisions. To do so, the authors use a sample of nearly 400 SMEs' purchasing managers, to better understand cooperation determinants from the buyers' perspective. The study reveals that in an electronic marketplace, cooperation is positively affected by termination costs, supplier relationship policies and practices, communication and information exchange, and negatively affected by product prices and opportunistic behavior. Moreover, both relationship commitment and trust play a major role in mediating the relationships between these five determinants and cooperation. Surprisingly, resources relationship benefits do not show a significant impact on either commitment or cooperation. Theoretical and managerial implications of these findings are discussed.